Markets regulator Sebi provides relaxation on group exposure limit for mutual funds

New Delhi: Debt-oriented mutual fund schemes that have more than 10 per cent exposure to their sponsors' group companies before October 1 have been allowed to continue with such investments till respective maturity dates.

Markets regulator Sebi's decision to provide such an exemption comes against the backdrop of debt-oriented mutual funds having a cap of 10 per cent in terms of their exposure to group firms of sponsors as well as asset management companies.

A circular about the 10 per cent limit was issued by Sebi on October 1, 2019.

In the latest circular, Sebi said "the investments of mutual fund schemes in debt and money market instruments of group companies of both the sponsor and the asset management company of the mutual fund in excess of the limits specified therein, made on or before October 1, 2019 may be grandfathered till maturity date of such instruments".

The maturity date of such instruments shall be as applicable on October 1, 2019, the regulator added.

Sebi has asked all asset management companies to publish on their respective websites a list of their group companies and those of their sponsor.

Further, the regulator has directed mutual fund industry body Amfi to publish on its website a list of all group companies along with names and identifier of the respective group that are considered for calculation of group exposure by mutual fund schemes and also the sector to which each company belongs.